First Quantum Minerals (FQM) has maintained its upward trajectory in production during the third quarter of 2023, a testament to the mining firm’s successful collaborations with the Zambian government over the past year.
Throughout this quarter, FQM achieved a remarkable milestone by completing its first concentrate sale from the newly established Enterprise Nickel Mine in Kalumbila. Additionally, the company made significant progress with the S3 expansion project at its Kansanshi mine in Solwezi.
This positive performance can be attributed to strategic changes in mining fleet deployment, which enabled the exploration of new mining areas and reduced reliance on variable-grade ore stockpiles.
FQM Country Manager, Dr. Godwin Beene, commented on the Enterprise project’s development, noting that the shallow ore’s metallurgical characteristics presented challenges that impacted recoveries. However, these challenges spurred a deeper understanding of the material’s impact, leading to ongoing improvements.
Dr. Beene revealed that production guidance for Enterprise in 2023 has been adjusted to a range of 3,000 to 5,000 contained tonnes of nickel, a revision from the previous projection of 5,000 to 10,000 metric tonnes.
Regarding the S3 expansion project, Dr. Beene reported that the detailed design is expected to be largely completed by year-end. Key equipment deliveries for the long-lead mining fleet and process plant have already commenced, including the commissioning of the first ultra-class trucks.
By the end of the quarter, approximately 90% of all mechanical equipment has been ordered, and the project procurement has reached around 55% commitment. Dr. Beene added that most of the capital expenditure for the S3 expansion is anticipated in 2024, with the first production expected in 2025.
Dr. Beene emphasized Kansanshi’s focus on mining cutbacks at M15 and M17, located at upper elevations in the main pit, to ensure higher grades and enhanced production for the remainder of 2023.
FQM Trident reported a substantial increase in copper production during the third quarter of 2023, producing 63,805 metric tonnes of copper, a notable growth of 9,760 metric tonnes compared to the previous quarter.
Dr. Beene attributed this success to operational improvements following challenges posed by heavy rains earlier in the year and higher-grade copper access during Q3.
However, the presence of very hard rock in Stages 1 and 2 of the open pit presented challenges, leading to increased blast requirements and hindering crushing reliability and milling efficiencies.
Stage 3 (Western Cut-back) mining at FQM Trident is scheduled to begin in the fourth quarter of 2023, providing more favorable mining conditions with softer material and shorter haul distances, ultimately improving overall mining efficiencies. Substantial ore contributions from Stage 3 are expected at the end of the second quarter of 2024.
Globally, FQM’s total copper production for the third quarter reached 221,550 tonnes, an 18% increase from Q2 2023. The quarter-over-quarter production increase was attributed to improved throughput and grades at the company’s three largest mines, particularly at Cobre Panamá, as well as Kansanshi and Sentinel in Zambia. Copper sales volumes in Q3 2023 totaled 218,946 tonnes, 2,604 tonnes lower than production.
On a global scale, the gross profit for the third quarter amounted to US$660 million, a 149% increase from Q2 2023. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the same period reached $969 million, reflecting a 71% increase due to higher sales volumes, partially offset by lower realized metal prices.